What it means for Chia Surkh where Genel has 20% Stake, will it be good for LFD or NotVallares to Buy Companies, Develop Fields With $2.2 BillionBy Ercan Ersoy - Sep 8, 2011 11:02 AM ETGenel Energy Plc, the oil company being formed from Vallares Plc’s purchase of Turkey’s Genel Energy International Ltd., will use its $2.2 billion in cash on acquisitions and developing existing fields, Chief Executive Officer Tony Hayward said. The new company will allocate one-third of the cash to accelerate development of its six oilfields in the Kurdistan region of Iraq, the former BP Plc (BP/) CEO who quit after last year’s Gulf of Mexico spill, said today at a news conference in Istanbul. An equal amount will be spent on acquisitions of some of the 41 oil companies operating in the region, which Hayward yesterday described as “one of the last great oil and gas frontiers.” The remainder will be used to buy companies in the Middle East. Vallares, a so-called blank check company founded by Hayward, financier Nathaniel Rothschild and banker Julian Metherell, raised 1.35 billion pounds ($2.2 billion) from investors in June. Yesterday’s $2.1 billion deal will be completed as an all-share reverse takeover and leave current holders of Vallares and Genel Energy with equal stakes. ‘Dominant Position’ “We will be participating in the inevitable consolidation among the 41 companies in the Kurdish region,” Hayward said. “There will be a series of consolidations and we want to have the dominant position in the region by building a bigger company.” The acquisitions, which may be in the form of equity stakes or oilfield assets, may begin shortly after the company completes its listing on the London Stock Exchange that’s expected to take place in October, Hayward said. The merged company expects to take its place among the exchange’s top 250 or 100 companies, he said. Genel Energy will also seek acquisitions outside the Kurdish region, especially in the Middle East and North Africa in the wake of the so-called Arab Spring, a wave of insurgencies for democracy in several nations in the region, Hayward said. Kurdistan has 20 billion to 25 billion barrels of “oil in place” and the reserves are unlikely to exceed 40 billion to 45 billion barrels, Natural Resource Minister Ashti Hawrami said at a conference in March last year.